Featured RSF Author: Sendhil Mullainathan

Sendhil Mullainathan, a member of RSF’s Behavioral Economics and Consumer Finance Working Group, will join the senior leadership of the Consumer Finance Protection Bureau, according to the U.S. Treasury. He will serve as the federal agency’s Assistant Director for Research.

"Under Sendhil Mullainathan, the Office of Research will promote evidence-based policy-making at the CFPB," said Elizabeth Warren, an assistant to President Barack Obama. "The Office will provide analytical support to the Bureau and strengthen its understanding of possible benefits and costs of potential CFPB policies."

Mullainathan is a member of the Foundation's Behavioral Economics Roundtable. RSF has also awarded him a number of grants to support his research. A list of RSF-funded papers and publications written by Mullainathan is included below, along with a list of related RSF books that examine consumer finance issues.


Behavioral Economics and Federal Government Policy

Awarded in 2009, this grant supported Mullainathan's effort to use behavioral economics to identify and reform key areas of federal policy. The award funded the following publications:

"Behaviorally Informed Financial Services Regulation," New America Foundation, 2008 (PDF)

This paper, co-authored with Michael S. Barr and Eldar Shafir, explores a different approach to financial regulation, which has largely been stuck in two competing models -- disclosure, and usury or product restrictions. Instead, the authors adopt a behavioral economic framework that considers specific psychologies within market contexts.

"Behavioral Economics and Tax Policy," National Bureau of Economic Research, 2009 (PDF)

This paper, co-authored with William Congdon and Jeffrey R. Kling, considers some implications of behavioral economics for tax policy.

"Policy and Choice," Brookings Institution Press, 2011

Co-authored with William J. Congdon and Jeffrey R. Kling, this book revisits the core issues of public finance through a behavioral economics perspective. The authors outline policy implications for social insurance, externalities, income support, redistribution, and taxation.

Decision Making Under Poverty: A Behavioral Research Program

Awarded in 2003 to Mullainathan, Marianne Bertrand and Eldar Shafir, this grant supported an ambitious research program that looked at the perceptions, attitudes, and decisions of those living in poverty. The award funded the following papers:

"A Behavioral Economics View of Poverty," The American Economic Review, 2004, 94 (2), 419-423 (PDF)

This paper, co-authored with Bertrand and Shafir, argues that “behavioral patterns of the poor…may be neither perfectly calculating nor especially deviant. Rather, the poor may exhibit the same basic weaknesses and biases as do people from other walks of life, except that in poverty, with its narrow margins for error, the same behaviors often manifest themselves in more pronounced ways and can lead to worse outcomes.”

"Behavioral Economics and Marketing in Aid of Decision Making Among the Poor," Journal of Policy Making and Marketing, 2006, 25 (1), 8-23 (PDF)

Abstract: This paper considers some relevant facets of the social and institutional environments in which the poor interact, and reviews some behavioral patterns likely to arise in those contexts.

Sendhil Mullainathan and Eldar Shafir, "Savings Policy and Decision Making in Low-Income Households," in Insufficient Funds, eds. Michael Barr and Rebecca Blank, 121-146 (New York, NY: Russell Sage Foundation, 2011).

In this chapter, Mullainathan and Shafir look at the context and situational factors that affect financial decision making in low-income households.

Executive Compensation: Skimming Versus Contracting

Awarded in 1997, this grant supported an analysis of CEO salaries, and resulted in the following paper, co-authored with Marianne Bertrand:

"Are CEOs Rewarded for Luck? The Ones Without Principals Are," Quarterly Journal of Economics, 2001, 116 (3), 901-932. (PDF)

The authors empirically examine two competing views of CEO pay -- the contracting and skimming models -- and explore the relationship between luck, CEO pay and corporate governance.

These RSF books examine a range of consumer finance issues, from access to credit among poor households to the application of behavioral economics in financial regulation.

Behavioral Public Finance

Editors: Edward J. McCaffery and Joel Slemrod
This volume looks at several facets of economic life and asks how behavioral research can increase public welfare.

Financing Low-Income Communities: Models, Obstacles, and Future Directions

Editor: Julia Sass Rubin
This volume brings together leading experts to assess what we know about the challenges of providing financial services and capital to the poor.

Public Policy and the Income Distribution

Editors: Alan J. Auerbach, David Card, and John M. Quigley
Public Policy and the Income Distribution tackles many of the most difficult and intriguing questions about how government intervention has affected the incomes of everyday Americans. The issues examined include welfare reform, poverty reduction and Social Security benefits.

Credit Markets for the Poor

Editors: Patrick Bolton and Howard Rosenthal
Credit Markets for the Poor offers a thorough examination of the credit options available to poor households. Experts in this volume explore community lending organizations, the effect of legal institutions on the ability of the poor to borrow, and programs that facilitate small-business development.

Fringe Banking: Check-Cashing Outlets, Pawnshops, and the Poor

John P. Caskey
Published in 1994, Fringe Banking was the first comprehensive study of pawnshops and check-cashing outlets, profiling their operations and customers.



RSF: The Russell Sage Foundation Journal of the Social Sciences is a peer-reviewed, open-access journal of original empirical research articles by both established and emerging scholars.


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